‘Do You Even Want Us to Exist?’ A Bank Chief Fights to Survive.
In a private meeting last month with bank chiefs, including Jamie Dimon of JPMorgan, Treasury Secretary Janet L. Yellen said she would welcome more mergers, according to a person who participated in the briefing, in part because it would make it easier for regulators to conduct oversight.
Mr. Vecchione said he had never spoken to Ms. Yellen or her staff before this year, and now he receives check-in calls from the deputy Treasury secretary, Wally Adeyemo. Mr. Vecchione said that he was not against more regulation, but that it would add to the bank’s costs and, ultimately, confer another advantage on larger competitors that could better withstand the expense.
He said he had been asking regulators lately, “Do you even want us to exist?”
There is a model for a more concentrated banking sector. In Canada, six banks dominate 90 percent of the market, versus about 50 percent for the six largest banks in the United States. Experts say there is little incentive for banks in Canada to take outsize risks, though there is also relatively little competition, which means borrowers may face higher interest rates.
“I don’t think we want to get to the point of six banks, because that would really stifle lending,” said Ben Gerlinger, a regional bank analyst at Hovde Group.
Bruce Van Saun, chief executive of Citizens Bank, said that for the first time in his career he was trying to make his lender smaller, in part by discouraging depositors who would be most likely to close their accounts in the first signs of a crisis. He hopes that will convince investors that the bank, the nation’s 14th largest, is stable. (One indicator that the United States is littered with banks: Citizens, which is based in Providence, R.I., is separate from First Citizens, the North Carolina lender that took over Silicon Valley Bank’s former branches, as well as hundreds of other lenders with “Citizens” in their name.)
“You have to show deposits shrinking, or else you go on the list of ‘problem banks,’” Mr. Van Saun said. “Is the cure going to be worse than the disease?”
Source: The New York Times
